Algae looks pretty disgusting in the old swimming pool pictured above, but the power of algae is now being harnessed by those hoping to exploit it as a powerful biofuel. Fortune has an interesting article about a huge new biofuel farm in New Mexico.

On a 2,200-acre expanse of desert scrub in Columbus, N.M. (pop. 1,678), Sapphire Energy has built the world’s first large-scale farm to grow algae and produce crude oil. The five-year-old company has spent about $60 million constructing an array of about 70 ponds, each the size of a football field, and a refinery, which began producing oil this past summer. The first barrels are rolling out now.

Algal oil “has the potential to change the world,” says Cynthia Warner, Sapphire’s chief executive, because the process by which it is grown will allow any nation to produce oil. Warner joined Sapphire after 28 years in the oil business, most recently as head of global refining at BP (BP). She couldn’t resist the allure of algae. Productive and versatile creatures, they grow fast, don’t need to be fed, and build up oil in their cells after being exposed to sunlight and CO2. They like salty or brackish water, so ponds can be built on cheap land where not much else will grow. Into each pond go genetically engineered single-celled algae that grow to maturity in about five days, after which they are skimmed from the water and put through a thermo-chemical “wet extraction” process to separate the oil. The company plans to make about 100 barrels of oil a day in New Mexico. If all goes according to plan, commercial production of perhaps 10,000 barrels a day will begin in 2018.

A ton of money has been plowed into the green space as venture capitalists try to capitalize on the desire for clean energy and renewable fuels. Read the rest of the article to get more information on this project. It will be fascinating to see if this project becomes economically viable. In an era where fracking is lowering the costs of natural gas and increasing oil output in the United States, it will be more difficult for projects like this to make money without subsidies.

The story is interesting as it also focuses on the involvement of the Southern Utes Indian community as an investor in the project. But the most interesting element involves the interrelated efforts to develop alternative energy.

One of the keys to new projects is eliminating waste and taking advantage of heat and other byproducts of one energy-generating process and using these byproducts in another process built next to the first process. Here’s a summary of how this will work regarding this algae process.

Solix’s facility project is next to the natural gas processing plant for access to the carbon dioxide waste stream, which will be used to nourish the algae — a kind of biological recycling of carbon dioxide before its discharge into the atmosphere as the vegetable fuel is burned.

The plant also produces waste heat, which could be used to warm the algae beds in winter. In addition, the high desert plateau of southwest Colorado is one of the sunniest spots in the nation, providing solar radiation that accelerates algae growth.

Central to Solix’s business model, Dr. Willson said, is the hope that power plants and other factories now venting carbon dioxide will allow the company to build an algae farm next to their carbon dioxide vent pipes. A plant could sell the oil or biodiesel, and Solix would earn its return by being a part owner-operator, or by licensing the technology.

Conservation and efficiency are the new buzzwords in the renewable energy field (among many). Energy should never go to waste, and many projects that were once too difficult to make commercially viable can have a new life when one examines how to exploit byproducts from well-established processes. The possibilities are endless.